Cannabis shop sues Albert Lea over City Council’s rejection of license

The owner of a cannabis microbusiness is suing the city of Albert Lea, arguing the City Council broke state law when it voted in July to reject his application to open the community’s first cannabis shop.

Jacob Schlichter, owner of the Smoking Tree, filed a petition Monday in Freeborn County District Court asking a judge to order the city to issue his retail registration. His attorneys say state law left the council no legal grounds to deny it.

“The City Council’s decision was based purely on politics — specifically, members’ policy disagreements with Minnesota law,” attorney David Liebow wrote in the filing.

Schlichter’s attorneys also petitioned the Minnesota Court of Appeals on Aug. 20. That case is pending.

The case could become an early test of Minnesota’s cannabis law and its adult-use cannabis industry.

Under Minnesota’s cannabis law, local governments can cap the number of retailers based on population size and impose restrictions on where they operate, but cannot prohibit licensed cannabis businesses from opening.

Albert Lea’s ordinance requires the city to register cannabis businesses on a “first-come, first-served” basis tied to a state Office of Cannabis Management (OCM) license.

“I do not like the way the state Legislature, and the governor, has rammed this down our throats with very little say in the process — all because they’re hungry for more revenue," Mayor Rich Murray said at the meeting.

Albert Lea has capped cannabis retailers at two. After revisiting Schlichter’s application in August, the council approved two other applicants and again denied the Smoking Tree.

Schlichter was convicted in 2017 of a misdemeanor involving a minor and sentenced to two years of probation, which he later violated, according to court records. That background gained attention as the City Council considered granting his license.

In a statement sent by email, City Manager Ian Rigg said the city denies Schlichter’s claims and “will vigorously defend its obligations to protect the residents of Albert Lea.”

Jason Kuboushek, the attorney representing Albert Lea in the suit, wrote in a letter filed in court Tuesday that the case should be dismissed. Because Schlichter already has an appeal pending in the Court of Appeals, Kuboushek argued, the district court lacks jurisdiction.